ELECTRICITY TARIFF INCREASE: NERC DENIES, WAVES THE LAW AT MEDIA HOUSES AND THE PEOPLE

In a viral news on 5 January 2021, it was reported that electricity tariff has been increased by 50%. According to the reports, the Nigerian Electricity Regulatory Commission (NERC) has approved over 50 per cent hike in electricity tariff effective January 1, 2021.

Expectedly, the news did not go down well with Nigerians as public outcry greeted the perceived development. For instance, Civil Society Organisations, in a statement, condemned and rejected the alleged increase and called for a halt in implementation.

However, in a dramatic twist of events, the NERC has denied 50% increase in electricity tariff. In a statement officially made available, the Commission clarified as follows:

1. PUBLIC NOTICE ON PURPORTED 50% INCREASE IN ELECTRICITY TARIFFS

The attention of the Commission has been drawn to publications in the print and electronic media misinforming electricity consumers that the Commission has approved a 50% increase in electricity tariffs.

2. The Commission hereby state unequivocally that NO approval has been granted for a 50% tariff increase in the Tariff Order for electricity distribution companies which took effect on January 1, 2021.

3. On the contrary, the tariff for customers on service bands D & E (customers being served less than an average of 12hrs of supply per day over a period of one month) remains frozen and subsidised in line with the policy direction of the FG [Federal Government].

4. In compliance with the provisions of the EPSR Act [Electric Power Sector Reform Act) and the nation’s tariff methodology for biannual minor review, the rates for service bands A, B, C, D and E have been adjusted by NGN2.00 to NGN4.00 per kWhr to reflect the partial impact of inflation and movement in forex.

5. In the light of strong public interest on this matter, the media is hereby requested to retract their earlier publications misinforming electricity consumers nationwide about a purported 50% increase in electricity tariffs.

6. The Commission remains committed to protecting electricity consumers from failure to deliver on committed service levels under the service-based tariff regime.

7. Any customer that has been impacted by any rate increases beyond the above provision of the tariff Order should report to the Commission at customer.complaints@nerc.gov.ng

By paragraph 4 above, NERC however admits that there has been some review in tariff rates. The Commission contends that the review was done in line with the relevant statute, the EPSR Act. The Commission also states that the affected service bands are bands A, B, C, D and E. It claimed that the adjustment in tariff rates is by NGN2.00 to NGN4.00. On the face of this, it looked like a 100% increase for the specified bands instead of the 50% increase it seeks to deny. However, this does not appear to be precisely so. “By NGN2.00 to NGN4.00” does not mean the same thing as “From NGN2.00 to NGN4.00”. The Commission failed to clear the ambiguity for the sake of better consumption of the information by the public. 

Beyond the denials and explanations offered, NERC sought to justify the admitted level of tariff adjustment by citing inflation and the unfavorable movement of foreign exchange. 

In paragraph 5 of NERC’s public notice above, the Commission accuses media houses of misinforming the public and demands immediate retraction of the news within the space. But the media is not to be blamed entirely. Rather than wave the law, excuses and blame, the Commission ought to have simply supplied the much needed explanation and cure every apparent ambiguity. Typically, if not for the media, an average Nigerian may never comprehend the discreet pattern of tariff increase. Even in NERC’s denial, the Commission still admits upward review of tariff.

Conclusion

The only committment from NERC and Federal Government that Nigerians will ever treasure is steady power supply. To the average Nigerian, all this technical information, computation and justification by NERC means little or nothing in the face of poor power supply in the country. Therefore, any attempt to increase electricity tariff can hardly be welcome. In the beginning, Nigeria was without form and void, and darkness has always fallen on the face of the deep and has remained so. Not even the present administration has the slightest clue on how to solve Nigeria’s power problems, to make darkness a thing of the past. Steady electricity supply has remained a mystery. If the principalities and powers that have stood against Nigeria refining her own oil and gas, and providing the resources needed for more efficient power generation can give up their self interests and gains, the mysteries would be demystified. 

 

Featuresd Image Credit: The Sun Nigeria



Stephen Azubuike
Author: Stephen Azubuike
Stephen is a lawyer with expertise in Commercial Dispute Resolution and Technology Law practice. He is a Partner at Infusion Lawyers. He has successfully argued cases from the High Courts of various jurisdictions to the Appellate Courts on behalf of financial institutions, other corporate bodies and multinationals. He has worked with a number of startup tech companies. He tweets @siazubuike.

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